What is Zero-Party Data: definition and how to use it for advanced personalization
Thanks to the advent of social media, companies now have access to more consumer data than ever before. And this data can be precious to brands looking to personalize their marketing efforts.
In the ever-changing digital landscape, staying ahead of the curve is essential for businesses of all sizes. One of the key trends that all companies should be aware of is zero-party data as some of the most reliable and accurate data out there. It’s not subject to biases or inaccuracies of other sources, so you can trust it to be completely accurate.
So if you’re looking to take your personalization efforts to the next level, check out our brief overview of zero-party data definition, its difference from the other types of data, and the benefits of using it to advance personalization.
What is zero-party data?
Simply put, zero-party data is data provided by customers, meaning they share information about themselves willingly and proactively with the brand. This can include anything from a name, shipping, and contact information to size, style preferences, purchase history, communication preferences, or the types of information they opt to receive.
Using zero-party data for personalization can result in some awe-inspiring results. By using it, businesses can create highly targeted and accurate sales and marketing campaigns, including email drip campaigns, that speak directly to their customer’s interests and needs and boost customer loyalty.
The term zero-party data was first proposed by Forrester Research in opposition to other previously known types of data used for sales and marketing purposes. Marketers and sales reps should understand the difference between first-party, third-party, and zero-party data, as each type offers different opportunities and insights for your business.
The difference between first-party data, third-party data, and zero-party data
First-party data is data that the company itself collects. This could be data from a customer database or data from website visits. Examples also include scrolling, hovering, and active time spent on the page. Such data as purchases and downloads are considered first-party data, as well.
There are a few ways to collect first-party data: through a sign-up form or tracking customer behavior on your website or app. No matter how you collect it, first-party data is a goldmine for marketers and sales reps as it provides an in-depth understanding of an individual’s interests.
Third-party data is collected by someone other than the company itself. This could be a market research firm, a data broker, CRM, call center systems, or even another partner company. For example, lead generation using email automation tools or buying a list of leads from a data broker would be third-party data.
The downside of third-party data is that it’s not always reliable because you don’t have control over how it’s collected or how it’s been curated.
The main distinguishing feature of zero-party data is that it’s not collected by either the company or anyone else. While it often comes from customer social media, comments to blog posts or news articles, website forms, polls, surveys, membership applications, and emailing directly to the company, other types of data come from customer web activity.
When you provide your contact information to a business, you give them zero-party data. Below you can see an example of how Snov.io collects zero-party data from new-coming customers (also giving them an opportunity not to provide their personal information if they aren’t willing to).
Zero-party data is always provided voluntarily, and companies often incentivize customers to share their data in exchange for some perks like exclusive offers, discounts, and other rewards like free webinars, newsletters, e-books, and other educational materials.
It’s incredibly valuable data to businesses because this means there’s no ambiguity about using it for segmentation and personalization, so it allows them to create more meaningful relationships with their customers.
Types of zero-party data
There are 3 types of zero-party data: demographic, psychographic, and behavioral, all of which can be used for personalization.
- Demographic data includes age, gender, location, income, etc. For example, if you know someone’s age, you can create email marketing campaigns or show them ads for products specifically targeting their age group.
- Psychographic data gives a deeper understanding of customers’ interests and hobbies. If you know someone’s field of interests, you can target them for products that catch their attention.
- Behavioral data digs deeper and explores product preferences, purchase history, and customer buying intentions. With it, you can conduct behavioral segmentation of your customer base and offer your customers similar products they have previously purchased.
Benefits of using zero-party-data
How can zero-party data be used for personalization? Here are a few examples:
- Use customer data to create targeted email campaigns,
- Personalize website content based on customer interests,
- Use purchase history to recommend related products,
- Retarget customers with special offers,
- Create custom ads on social media platforms and more.
The great thing about zero-party data is that it helps you build more accurate customer profiles and identify buyer personas. This, in turn, allows you to target your campaigns better and create more tailored content that is more likely to resonate with your audience.
Overall, using zero-party data allows you to get to know your customers better and create more personalized experiences, leading to higher engagement and conversion rates.
Another benefit is that collecting zero-party data is a way to comply with privacy protection legislation and show that you care about your customers’ privacy.
As you might have heard, different privacy laws worldwide, particularly the EU’s GDPR, require companies to get explicit consumer consent before collecting or processing their data. This can be tricky, especially regarding sales and marketing activities, but zero-party data solves this issue, which helps build more trust between brands and their customers.
If businesses want to achieve more personalized experiences for their customers and comply with the tightened privacy laws, they need to start collecting and using zero-party data voluntarily shared by customers.
This can be done in addition to data collected by businesses themselves and data obtained from other companies. Each data type has its advantages for businesses, and marketers and sales reps must understand the difference between them to make the most informed decisions.